Introduction

In the last decade, Information and Communication Technologies (ICT) have expanded at unprecedented rates in both developed and developing economies. In contrast to the Internet, mobile phones have become the most rapidly adopted technology in developing countries.

Due to the fact that the costs associated with the installation of mobile phone towers is relatively low (Jensen, 2010). Recent statistics for mobile phone penetration indicate that 8 of 10 people in the world had a subscription in 2011, up from 1 in 10 in 2000 (World Bank, 2012). Not surprisingly, a small but growing body of empirical literature has credited mobile phones with reductions in transaction costs and efficiency gains in agriculture (e.g., Aker, 2010; Goyal, 2010), health (e.g., Dammert et al., 2014; Pop-Eleches, 2011) and financial markets (e.g., Karlan et al., 2010). In the labor markets, the expansion of ICT technologies has invigorated research on a new array of labor market intermediaries, such as online job boards, social media sites, and e-recruiting firms (e.g., Bagues and Sylos, 2009; Nakamura et al., 2009; Stevenson, 2009), which has led to the reallocation of job search effort (Kuhn and Mansour 2014; Stevenson 2009), and more diversified search behavior (Cahuc and Fontaine, 2009; Kroft and Pope, 2010).

Understanding the role of subjective expectations on economic behavior is central to economic modeling and policy design. While most progress in the literature pertains to the influence of subjective expectations on a number of economic outcomes including education, income, migration and productivity (see the surveys in Delavande et al., 2011; Manski, 2004), little is known about how individuals use the available information to formulate and update their subjective expectations. In fact, few studies have directly addressed the role of information on the formation of subjective expectations (e.g., Jensen, 2010; Luseno et al., 2003; Stinebrickner and Stinebrickner, 2012). In this study, we investigate how (digital) information about job-market opportunities sent to jobseekers via short text messages (SMS) influence subjective expectations about their job market prospects. By providing faster and cheaper access to information, mobile phone technologies might influence how individuals shape their expectations regarding future job prospects as searchers can access relevant, less costly and up-to-date information on job vacancies.